Councils hand back £46m RTB cash
Town halls have handed almost £50m in unspent Right to Buy cash earmarked for replacement council housing to the government, claiming rules make it impossible to spend.
Figures obtained by Inside Housing under the Freedom of Information Act show £46.5m has already been handed back to the Treasury by councils. Councils have three years to spend the portion of Right to Buy receipts earmarked for replacement homes, before having to hand the money to the Treasury with interest.
This time limit, along with restrictions on mixing receipts with other grant and a rule limiting the receipts spent on each home to 30% of build costs, have been flagged by councils as reasons why the cash has not been spent. The Department for Communities and Local Government (DCLG) said 14 councils had handed back money.
Several of these are believed to have been before the three-year deadline was up.
Matthew Warburton, policy advisor at the Association of Retained Council Housing, said: “30% has never been enough, and the position is even worse since the rent cut. Councils have been saying it has become much harder to spend the money.”
Peter Box, housing spokesperson at the Conservative-led Local Government Association (LGA), said: “It is imperative that the current Right to Buy scheme is reformed to ensure councils are able to replace housing sold quickly and effectively.”
In September, Haringey Council returned the £15m it had received to build replacements. Alan Strickland, cabinet member for housing and regeneration, said the red tape meant it had been unable to offer the cash to local housing associations.
Returned receipts are recycled back out by the Homes and Communities Agency or the Greater London Authority as grant for new social or affordable rent housing. The exact mechanism for distributing this cash has not been confirmed.
The figures released to Inside Housing show £2.5bn has been raised through the sale of 35,000 homes since discounts were lifted, generating £1bn for replacements, which has so far funded 4,000 starts.
The remainder of the cash has been split between council general funds, the repayment of debt and direct payments to the Treasury, which now total £527m.
A DCLG spokesperson said: “Any returned receipts may only be used for housing let at social or affordable rent.”